But why is intraday trading is a volatile investment? What causes this volatility? And what problems do the investors face for this volatility?
Volatility in a market is very harmful to the investors. It compels the investors to sell out their intraday shares at the wrong time. But volatility is not essentially same as a risk; they are completely different. Volatility in the intraday market is very common. Therefore, only by learning the reasons behind the volatility of the intraday investments, the risk factors can be truly assuaged.
This is something that no one can ever deny. The economy today is highly volatile and uncertain. Hence, it experiences a period of contraction and expansion on a frequent basis. Now, it is well known that the contraction in the economy decreases the revenues generated by the businesses. Furthermore, it reduces the corporate earnings due to the fixed overhead. It is well known that the intraday market is highly emotional or over reactive. Hence, the contraction and expansion of the economy is completely reflected in the intraday market.
So, it can be said that the volatility in the intraday market is the reflection of the economy or the business market. As stated before, a risk is not essentially same as the volatility in case of intraday trading. However, wrong decisions in the volatile intraday market may cause huge losses.
Hence, it is always better to stay out of the poor quality shares and to stay out of too much debt as it may cause problems. Intraday trading is one of the finest forms of stock market investments. So, be careful and vigilant; observe the market before investing in order to make profits from intraday investments. You surely donot want to risk and lose a major amount just because of the wrong calculations you have made. Hence, time to think wise.
About the Author:
DreamGains is one of the leading Stock and Commodity market advisors based in India. They provide clients with wide-ranging, secured and finest financial solutions to achieve sustained growth. Visit www.dreamgains.com for more information.
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